Mauritius heads off Brexit downturn with airfreight rebates

When Great Britain voted to break away from the European Union, many knew the “Brexit” would have far-reaching effects on the world economy – but perhaps not quite this far. The tiny island nation of Mauritius, for example, said it will launch an airfreight rebate program, called the “Speed-to-Market Scheme” (STMS), to incentivize apparel exports in the wake of the vote.

The remote island, located about 2,000 kilometers off the coast of southeastern Africa, in the Indian Ocean, is unusually reliant on airfreight for its exports, so government officials are taking steps to ensure that business remains brisk, despite clouds on the horizon.

The textile and apparel manufacturing program will only apply to companies in the apparel sector, according to a government website. Under the terms, Mauritius will provide a 40 percent refund on airfreight cost to exporters to Europe, including the U.K., of which the island is a former colony and maintains cultural and economic ties to this day. The program, scheduled to start April 1 and run for two years, and will be managed by Enterprise Mauritius, the gency responsible for export promotion and export development.

The agency also noted that the textile industry has spearheaded the “structural transformation of the Mauritian economy for four decades,” acting as the engine of economic growth, attracting foreign direct investment from various countries and bolstering the manufacturing base of the country. With trade winds shifting, the agency said it is hoping to stay ahead of protectionist policies that are welling up around the world.

In 2015, about 40 percent of the country’s US$933 million in domestic exports of textiles went to Europe. The United States made up the second-largest market at 24 percent, and South Africa was next at 21 percent.

Despite its remoted location, the island nation has a population of 1.29 million and has attracted a significant garment industry. Factories on the island manufacture products for global brands, such as Zara, Guess, Adidas, Levi’, and dozens more recognizable brands.